I see this stated all the time, but I've never seen a good explanation of why that is.
You could also make all kinds of claims about why a small and sparsely populated country like Norway or Sweden could never be prosperous - they don't have the economies of scale to attract investment, they speak languages that not many people outside of those countries know, etc. But they seem to have figured it out.
Rather than just giving up and saying that we cannot replicate their success, maybe we should be looking for novel ways of implementing such a system (after first confirming that what they're doing actually doesn't work in a much larger country, rather than just taking it as fact).